Over one in five (22%) of home care providers and 6% of nursing/care home providers fear having to close because of late invoice payments by local authorities and Independent Care Bodies (ICBs).

The research by the Institute of Health and Social Care Management (IHSCM), Care England, The Caring View and No1 People found over £679 million is currently outstanding for more than 30 days for care services in England at a cost to care providers of around £31 million per annum based on a 5% cost of capital.

Of this amount, £567 million is related to local authorities and £112 million for ICBs for continuing healthcare services.

Almost two-thirds (61%) of respondents reported having at least one or more invoices unpaid after six months.

“These findings are indicative of a deeply concerning trend that cannot be ignored, said Adam Purnell, director of social care at the IHSCM.

“The impact of delayed payments goes far beyond mere statistics; it cripples care providers who are already facing immense challenges from insurance costs, rising energy bills and workforce shortages.”

Professor Martin Green, chief executive of Care England, said: “Care providers continue to find themselves facing an array of financial pressures. The government has an opportunity to enact meaningful change. The impact of late payments to care providers impacts cash flow and credit ratings and can lead to higher energy costs or borrowing as well as a growing number of providers expressing a desire to cease operating. Our sector is not immune from these financial pressures. We need something to change.”

The IHSCM called for all stakeholders, including local authorities and ICBs, to collaborate with the care services sector to find viable solutions that expedite payment processes, reduce outstanding debts and create a sustainable future for care providers.

An LGA spokesperson said: “Across the country, councils continue to work closely with adult social care providers in the private and not for profit sector and are acutely aware of the financial pressures they are under. Councils do all they can to avoid exacerbating those pressures.

“Processing payments at the scale that councils do means there are inevitably complexities which can sometimes cause delays, such as when required information in an invoice is not given.

“A vast majority of payments made by local authorities are correct and on time, councils have absolutely no deliberate intention to pay late.”